Avoiding bankruptcy though an Involuntary Arrangement (IVA)

Individual Voluntary Arrangement (IVA) statistics

An IVA is a legally binding agreement between your creditors and you to repay a just percentage of your debt over a period of time, usually 5 years. After the 5 years, you will have avoided bankruptcy and be debt free.

Not only will you avoid bankruptcy, you may also be able to keep your house. The downside is that the payments will be demanding and your credit rating will be severely damaged for six years. You may also need to re-mortgage your property.

What are the benefits of an IVA?

The main benefits of an IVA are as follows:

What are the consequences of an IVA?

How much will I have to repay?

The amount you repay during the IVA is usually expressed as a percentage or as the number of penny's in the pound. This is why you see some IVA companies promoting through messages such as "Wipe up to 75% of your debt". In this instance you would only repay 25% of what you owe.

There is no fixed amount that you have to propose for the IVA. It is whatever the creditors decide to accept from you. Once the IVA is in place though, it is important that you keep to the terms.

You should realise that your creditors will expect you to contribute as much as you can towards your debts. As with any debt solution the IVA is no easy route out of your debt.

Who is an IVA for?

Any individual can apply for an IVA. This includes employed persons, self employed or individual members of a partnership.

You must have unsecured debts in the thousands.

You must have a regular income with enough spare income to qualify.

Many people who apply for an IVA do so to avoid bankruptcy. Through an IVA you should be able to keep your property.



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